Whilst the GT Academy demo/time trial didn’t do that much to impress me personally, the finalists appear to be competing on a much more advanced version of Gran Turismo 5.
The updated demo, as can be seen in the shots below (via GT Planet) appear to show online functionality, including a live weather hook-up. It’s unclear as to what this actually involves, but have a good stare at the off-screen photos to see what else you can make out.
Thanks, Andytorr.